Firm: Get a second opinion with gas pipeline easements

May 13, 2012

BLOOMINGDALE - Some members of the legal community are warning property owners not to sell themselves short when it comes to natural gas pipeline easements.

William A. Goldman and Michael Braunstein of Columbus-based Goldman & Braunstein LLP, said the general public typically doesn't realize the impact a pipeline can have on the long-term value of their property.

"People might think a pipeline is going to be underground, so it won't be much of an issue," Braunstein said Wednesday prior to a landowners' meeting at the Jefferson County Joint Vocational School. "We tell them as with any real estate transaction, they should get a second opinion."

Article Photos

LANDOWNERS MEETING — Columbus attorney William A. Goldman, right, reacts to a question posed by Ed Hashbarger, a member of the Jefferson County Oil & Gas Committee, at a meeting for landowners concerned about gas pipeline easements. The meeting was held at the Jefferson County Joint Vocational Center in Bloomingdale. -- Linda Harris

The problem, Goldman said, is that a gas pipeline severely limits how a property can be used in future: Nothing can be built above it, nor can you plant trees on the site, though annual crops are permitted. There also are restrictions on heavy vehicles driving across the surface above the underground pipelines.

"A pipeline can really restrict your ability" to use the property, Braunstein said. "It causes problems with the land that's taken, also with the land that's not taken."

He said in some instances, the pipeline may well be placed "a few hundred feet from (a) home."

"Everybody tells you it's not dangerous, but the fact is, they do explode sometimes, sometimes they leak and sometimes the pipeline companies don't maintain them the way they ought to," he said. "It decreases the resale value of a house, sometimes significantly."

The 1,230-mile Appalachia-to-Texas pipeline (ATEX Express) is slated to transport ethane from the Marcellus and Utica shale of Pennsylvania, West Virginia and Ohio all the way to the Gulf Coast. Goldman & Braunstein said the northern portion of the pipeline involves laying 353 miles of 16-inch diameter pipeline, all the way from Washington County, Pa., across Ohio to Seymour, Ind., where it will connect with an existing Enterprise pipeline.

Properties in the pipeline's route will be surveyed, after which the company typically will offer a cash settlement. Property owners sometimes feel pressured to sign, he said, pointing out that declining the offer doesn't mean the pipeline will go elsewhere. Those who do decline the cash offer could find themselves being targeted with eminent domain proceedings.

"If anybody tells you they can stop the pipeline from going in, they're kidding you," Braunstein said. "You can't stop the pipeline but sometimes you can alter its course" if the intended route goes through wetlands or an archeologically significant area, for instance.

He said things like drainage, crop loss and future use of the property must be considered before signing on the dotted line, not to mention the minutia like keeping fences locked if you have livestock or limiting the number of keys you give out.

Then there's the matter of compensation.

"You really need to have an expert look and determine what fair market value is and what the changes will be," he said. "Realize, eminent domain value is different than other values - it's not about what the land's worth now or what the landowner is using it for. Eminent domain values land at 'its highest and best use,'" Braunstein said, "(and) that may be very different from what you're using it for."

Braunstein said it's important for people to understand that in eminent domain cases, "the individual does have more rights than in other cases."

And he said the only way to be sure what the pipeline company is offering is fair is to get a second opinion to help "level the playing field" between homeowners being pressured to sign and the landsmen who sometimes can be intimidating.